Reports
Discussion Papers
No.983 The Gulfization of Stock Markets: Evidence on Regional Spillovers from GCC to MENA, Asia, and Africa
by Jun Saito
December 2025
ABSTRACT
This study analyzes stock market “Gulfization,” whereby spillovers from the Gulf Cooperation Council affect equity markets in capital-receiving countries. Using weekly data from 2000–2023, we estimate pairwise VAR models and construct a spillover index based on cumulative impulse responses, which is linked to foreign direct investment, remittances, and trade. Spillovers are strongest in MENA—particularly Egypt, Jordan, and Palestine—moderate in parts of Asia, and weak in Africa. Correlation results show that remittances and trade, rather than FDI, explain spillovers. We conclude that Gulfization reflects a structural form of regional financial interdependence.
Keywords: Gulfization, GCC countries, stock market spillover effects, economic ties, emerging markets, capital flows, financial integration
JEL classification: F21, F24, F36, G15, O16
PDF available at https://hdl.handle.net/2344/0002001621
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